2009 Archives

60 Seconds with Rick Sievertsen, VP of Client Solutions, Advantage IQ

60 Seconds with Rick Sievertsen, VP of Client Solutions, Advantage IQ

BF: When analyzing a company’s expenditures, in which utility charges can Advantage IQ find the most significant savings opportunities? RS: Focus on the areas where you have the greatest expense and hence the greatest opportunity for cost savings. If you spend the most on electricity, look closely at your electricity costs and consumption. If you have a high natural gas requirement, you may want to look more closely at your natural gas bills. Your type of business will determine where your greatest energy efficiency opportunities reside. An office building has the greatest opportunities in the areas of lighting and heating, ventilating and air conditioning. A restaurant has greater opportunity in the cooking area. A convenience store should look at the energy consumed by their freezer/refrigeration equipment. BF: What are common causes for overcharges by utility providers, and how can a company recover overpayments? RS: Meter malfunctions, being placed on a utility rate that is less than optimal, being billed for service for a facility that was closed or sold or receiving duplicate bills for the same facility or period are common errors found by Advantage IQ for our clients. Recovering utility billing errors requires that you identify the problem quickly and contact the utility provider to identify the problem as soon as possible. Comparing your monthly utility costs and consumption to prior periods is the best way to monitor your bills and identify errors. Identifying the problem prior to payment of the bill improves your chances of paying the correct amount. If you find an error after you have paid the bill, contacting the utility and documenting the error quickly will improve your chance of refund. Many utilities have limits on the amount of time for which a refund can be claimed. BF: What solutions can a company employ to reduce energy expenditures and become more sustainable? RS: Communicate with your employees about the impact energy has on the bottom line and enlist their support in cutting energy waste. Turn off lights when conference rooms, offices and restrooms are not in use and turn off office equipment when employees go home for the day. Utilizing building automation systems where available and not over-riding equipment designed to maximize energy efficiency are further ways to save. U.S. Energy Outlook In February, the U.S. Energy Information Administration announced some short-term energy outlook projections. • U.S. real gross domestic product (GDP) is expected to decline by at least 2.7% in 2009, triggering decreases in domestic energy consumption for all major fuels. Economic recovery is […]



Private hands, public money

Private hands, public money

The U.S. Treasury Department, Federal Reserve, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency, and Office of Thrift Supervision issued an unusual joint statement this week assuring the public that the government ”stands firmly behind the banking system during this period of financial strain.” The nation’s top financial overlords also went out of their way to declare forthrightly that the government’s ”capital assistance program” comes with the ”strong presumption” that ”banks should remain in private hands.” As Jon Lovitz’ famous ”liar” character used to say on Saturday Night Live: ”Yeah, that’s the ticket!” The government’s tepid assurances about the sanctity of the banking system presumably were designed to anesthetize the patient as our federal financial surgeons prepare to perform several life-saving amputations using a multi-trillion-dollar hack saw. The Treasury Department, which has invested more than $200 billion since September in a spectacularly ineffective effort to prop up Citigroup and AIG, has dropped all pretense of simply ”standing behind” these two dying, mismanaged behemoths. The government is now sitting on their chests, desperately performing CPR, as share prices for the twin basket cases rapidly head for penny-stock designation. By the end of this week, it is widely anticipated that Treasury will convert the preferred shares it secured in Citigroup and AIG into common stock, effectively increasing the public’s stake in both financial giants to at least 40 percent. Holding this stake below 50 percent will permit the government to avoid using the dreaded word — nationalization — while not quite giving it the power to fire the greedmeisters who have been running these fiscal conglomerates into the ground. Yeah, that’s the ticket! The government also is preparing to conduct a ”stress test” of the top 20 U.S. banks (each holding $100 billion or more in alleged assets), apparently to determine which of these illustrious institutions merit the AIG/Citi treatment. According to the government’s public explanation, these stress tests will measure how large banks would fare under extremely difficult financial conditions, such as high unemployment and negative growth for a prolonged period of time. The government tastefully did not specify what it means by ”prolonged period of time.” We know this is strictly a hypothetical scenario, but, just in case, we’ll ask the former Japanese finance minister to clarify this for us as soon as he sobers up. The big banking honchos aren’t buying the government’s cover story. Acccording to today’s Wall Street Journal, the large U.S. banks believe the stress tests are merely a prelude to the creation […]


FL Gov. Crist Announces Budget

FL Gov. Crist Announces Budget

Gov. Charlie Crist on Friday outlined his proposed $66.5 billion budget, which includes $4.7 billion in federal stimulus dollars. His recommendations include investments in education, workforce development and career training, transportation and energy conservation. The governor said his proposed 2009-10 budget will create or retain 314,590 jobs. Florida is slated to receive $12.2 billion of the $787 billion included in the American Recovery and Reinvestment Act over three years. Among Crist’s proposals: $31.2 billion in funding for all phases of education, including almost $1.8 billion of federal stimulus funds. $8.9 billion for economic development projects that create or retain 314,590 jobs. These jobs are in addition to the 206,000 Florida jobs expected to be created by the $12.2 billion pumped into Florida’s economy by the American Recovery and Reinvestment Act of 2009 over three state fiscal years. $5.1 billion to build and maintain the roads, bridges and public transportation facilities, which Crist said would create or retain an estimated 142,800 jobs throughout the state. An additional $1.4 billion provided by the American Recovery and Reinvestment Act of 2009 will go toward shovel-ready projects that can be initiated within 180 days, creating or retaining an additional 24,200 jobs. $157.1 million for the Office of Tourism, Trade and Economic Development, which he said will create or retain 43,291 jobs. $4.9 billion to maintain support for Florida’s increasing prison population and continue programs to reduce recidivism, prevent juvenile crime and keep violent criminals off the streets. An increase of $45 million for cash assistance program and food stamps, which provides temporary assistance to families and their children, to ensure funds are available for families and children critically impacted during these challenging times. $294 million for the Medicaid for the Aged and Disabled Program to restore 12 months of Medicaid health care coverage for 13,000 elderly and disabled individuals. $470 million for the Medically Needy Program to restore 12 months of Medicaid health care coverage for 21,000 individuals who have extremely high medical bills in relation to their annual income. $52 million for increased enrollment in the KidCare program to support an additional 46,000 children. Crist also called on the Legislature, once more, to quickly approve the 25-year compact he signed between the state and the Seminole Tribe of Florida, which he said would provide billions of dollars to Florida’s schools throughout the duration of the agreement. The agreement, signed in November 2007, would allow the tribe to install Las Vegas-style slot machines and card games in their casinos in exchange for $375 million […]


Oregon: A Wind Winner

Oregon: A Wind Winner

Western Community Energy (WCE), a community-based wind energy developer, is already expanding its headquarters in Bend, Ore., after choosing to relocate to the state just six months ago. “Over the course of the last several years, Oregon’s sustainable industries have truly begun to thrive,” says Tim McCabe, director of the Oregon Economic & Community Development Department (OECDD). “WCE is just one of many innovative companies that have discovered the state and the Governor’s commitment to sustainable industries and especially renewable energy.” Oregon has become a hotbed of renewable energy companies in a variety of sectors such as solar, wind, geothermal and tidal. The wind energy sector in Oregon has continued to grow over the years and has attracted major companies such as Vestas, the world’s leading supplier of wind power, which has announced plans to expand its North American headquarters in Portland, OR. According to WCE’s Chief Financial Officer Michelle Betz, the company chose Oregon for its headquarters because of the state’s commitment to renewable energy through a variety of financial and tax incentives and programs such as: the Oregon Business Energy Tax Credit (BETC), which covers up to 50 percent of a qualifying project’s applicable costs; the Energy Trust of Oregon (ETO), which provides resources and cash incentives to help homeowners, farms, ranches, businesses and government entities install wind power projects of up to 20 megawatts; and the Small Energy Loan Program (SELP), which promotes energy conservation and renewable energy resource development by offering low-interest loans for qualifying projects. “From a financial perspective Oregon is a fantastic place for our company to do business,” says Betz. “In addition, the state seems to understand at a very basic level the importance of promoting renewable energy projects.” WCE plans to capitalize on Oregon’s bounty of wind as well. In total, WCE booked $1.4 million in wind energy projects in 2008. To put perspective on the increase in projects for WCE, the company already booked $8.2 million in new projects in the first 15 days of January 2009. The company currently employs seven full-time employees and expects to hire an additional 11 employees within the next month. One major project that WCE recently completed is the Banner Wind Project, Alaska’s largest wind farm located in the city of Nome. A joint venture between Bering Straits Native Corporations and Sitnasuak Native Corporation, the 1.17 megawatt project will offset nearly 200,000 gallons of diesel fuel per year and nearly double Alaska’s installed wind capacity.


World’s largest cellulosic ethanol facility to be built in Florida

World’s largest cellulosic ethanol facility to be built in Florida

Highlands County, FL, soon will be home to the world’s largest facility to make biofuels from inedible plants, including grasses, according to an announcement from BP PLC and Verenium Corp. The British energy giant is investing $112.5 million in Verenium and received a 50% stake in licensing the company’s technology as part of the project. The new facility, which will cost an estimated $300 million, will be 25 times larger than Verenium’s pilot biofuels project with BP in Mermentau, LA, which was commissioned last month and currently is the world’s largest cellulosic ethanol operation. Verenium, based in Cambridge, MA, said the Florida facility will make 36 millions of gallons of fuel a year and is aiming for a cost of $2 a gallon, roughly on par with gasoline. The plant will use Verenium’s specialty enzymes to turn renewable grasses grown adjacent to the plant site into cellulosic ethanol, the company said. The project has received a $7-million grant awarded under the Florida Agriculture and Consumer Services Commission’s $25-million ”Farm to Fuel” initiative. According to a report in today’s Wall Street Journal, the rapid move from a demonstration-scale refinery to a full-scale biofuels facility reflects the growing interest in cellulosic ethanol, which comes from breaking down plant material and turning it into ethanol that can be used to displace crude-oil-based fuels in cars and trucks. The joint venture between BP and Verenium also is planning to build a second full-scale facility on the Gulf Coast. Other oil giants, including Exxon Mobil and Royal Dutch Shell are believed to be aggressively pursuing development of next-generation biofuels. The push for biofuels also is expected to get a big boost from the Economic Recovery stimulus bill recently passed by Congress and signed by President Obama. The bill allocates more than $12 billion to fund grants and loans for alternative energy projects. There has been increased interest in recent months on cellulosic ethanol, made from inedible grasses and leftovers from agricultural production, after the growing use of corn-based ethanol was blamed last year for using up crops and driving food costs higher. Verenium’s Louisiana plant uses crushed sugar-cane stalks, and the Florida facility will use grasses. The U.S. government mandates requiring big increases in the amounts of renewable fuels to be used in the nation’s gasoline tanks — at least 16 billion gallons of cellulosic ethanol by 2022, representing about 7% of total transportation-fuel consumption, up from a negligible amount today, according to the Journal report. Abengoa SA, a Spanish company, is building cellulosic ethanol […]


Maryland Expands International Reach

Maryland Expands International Reach

As many as 150 jobs are expected to be created in Maryland in the next few years by foreign companies that set up operations in the state within the past year, state officials said recently. Thirteen companies from Israel, Russia and countries in Europe and Asia have opened Maryland offices in the past 10 months, compared with just two new foreign companies that the state helped to attract in 2007, officials said. Gov. Martin O’Malley and economic development officials said stepped-up outreach efforts are paying off. Companies in bioscience, energy, technology, defense and aerospace industries have opened in Howard, Harford, Baltimore, Anne Arundel, Montgomery, Prince George’s and Charles counties. “They’re really beachheads,” said Christian S. Johansson, acting secretary of the Maryland Department of Business and Economic Development. “These companies want to do business in the U.S., and as these companies are successful, Maryland becomes that launching pad and the place for those operations.” It’s even more crucial in a recession to aggressively court foreign companies as a source of new jobs, O’Malley said in a statement. Foreign employers pay their workers, on average, 32 percent more than the national average wage, Johansson said. Maryland, like every other state, is facing rising unemployment amid the worsening economy. The state’s jobless rate spiked to 5.8 percent in December, the latest figures available and a 15-year high. The state lost jobs during a 12-month period for the first time since 2003, according to preliminary statistics released last month by the U.S. Labor Department. In January alone, the state received notifications from several private employers about pending layoffs and closures affecting more than 600 employees, mostly starting in March. Despite the slowdown, the manager of Mecanique d’Aquitaine, one of the 13 new foreign companies, said yesterday that he feels confident about longer-term prospects of expanding in Maryland, where the company hopes to tap into demand in the aerospace industry. The company, a subsidiary of a company based in southwest France, opened in October in Jessup with five employees. It makes precision parts for aircraft, with customers including Boeing Co. “We have good leads and are talking to the right people,” said Raphael Coeffic, Mecanique’s manager. “We feel very confident we can win contracts.” The state’s international business team has led economic development missions to targeted countries to promote the state, including one in September that visited Russia, China, South Africa and Finland. The state also has opened new trade offices in Japan, Canada, South Africa, Brazil and Montenegro. The department had an international travel […]


It’s raining Benjamins

It’s raining Benjamins

Thanks to Uncle Sam, a 90-year-old in the hills of West Virginia soon will be able to use a new broadband connection to apply for a new job cleaning up one of the government’s decaying nuclear weapons production sites. This person will be able to use a special one-time $250 cash payment from Social Security to purchase a ticket on a new high-speed rail link, which will magically transport the elderly applicant to his job interview. Unfortunately, when he arrives at this radioactive job-creation venue, our friend from West Virginia will be informed that the government’s new electronic database of all of the nation’s health records indicates that he died three years ago. Think we’re making this stuff up? Guess you haven’t read the fine print in the mammoth $787-billion economic recovery bill signed by President Obama this week. The spending portion of the package — not including billions in tax credits and other tax incentives — totals more than $500 billion. The blizzard of spending is divided into four major categories: infrastructure/transportation, education, health and energy. Before we detail the goodies, let’s get the bad news out of the way: direct aid to the states to help plug their burgeoning state budget deficits was reduced to a minor subcategory totaled a paltry $8.8 billion. If you think that is a large number, consider this: California currently is grappling with a $42-billion deficit. Perhaps the federal lawmakers assumed that the $44 billion they allocated in aid to local school districts and $86.6 billiion to defray state Medicaid costs will indirectly offset state budget deficits. We’ll see. Here’s how the stimulus spending was allocated by Congress: Education: $44.3 billion — aid to local school districts $25.2 billion – funding for special education and No Child Left Behind $15.6 billion – increase maximum Pell Grants from $500 to $5,300 $2 billion – Head Start Energy: $11 billion – construction of ”smart” electricity grid $5 billion – weatherization of existing dwellings $6.4 billion – cleanup of nuclear weapons production sites $6 billion – loans for renewable energy projects $6.3 billion – clean energy/energy efficiency grants to states $4.5 billion – converting federal buildings to energy efficiency $2 billion – development of electric car batteries Health: $86.6 billion – state Medicaid costs $24.7 billion – subsidize 65% of COBRA medical coverage payments for unemployed. $10 billion – NIH and other health-related research projects $19 billion – create electronic database of all health records $1 billion – prevention/wellness programs Transportation/infrastructure: $27.5 billion – highway and bridge construction/repair $8.4 billion – mass transit $8 billion – high-speed rail $1.3 […]


Loose Change

Loose Change

We knew it was a bad sign when Robert Rubin was standing behind Barack Obama when Obama introduced his team of economic wise men a few days after the presidential election. Rubin, the champion of deregulation who served as Treasury Secretary under Bill Clinton, spent the past few years as the eminence grise of Citigroup. Under his stewardship, what was once the largest banking conglomerate gorged itself on toxic assets while Rubin collected more than $100 million in personal compensation. Last month, with Citi still hemorrhaging despite an infusion of $45 billion from U.S. taxpayers, Rubin crawled away from the scene of the carnage. On his way out the door, he petulantly told the New York Post that anyone complaining about his compensation needs to understand that he had better offers elsewhere, but took less to play his role in the destruction of the U.S. banking system. So it should come as no surprise that Rubin’s protege, the tax cheat Timothy Geithner, is as clueless as his mentor. Geithner emerged in the aptly named Cash Room at the Treasury Department yesterday to unveil his long-awaited plan to rescue the banking system. With the global financial system completely broken, many leading economists assumed that the new Treasury chief would announce a thinly disguised nationalization of the U.S. banking system. They assumed that Geithner would have no choice but to tell us that Uncle Sam would scoop up all the toxic assets and lock them in a federal vault until they regain a smidgeon of value, and that the government would take a majority ownership stake in all the large banks and recapitalize them. This would be very expensive—say $3 trillion or so—but it might work. The conventional wisdom said that shareholders in the defunct banks would be told to shut up and accept a nickel for every dollar in worthless equity they hold. Some of us also fantasized that the boards of directors of the defunct banks would be removed and sent to undisclosed locations, where they would be subjected to enhanced interrogation techniques until they reveal what they did with the $400 billion in federal bucks they received last fall. Well, this was all wishful thinking. Timmy the tax cheat thinks he has a better idea. Geithner says he plans to give up to $1 trillion to private investors known to speculate in distressed assets — in common Wall Street parlance, these characters are referred to as ”vultures”– and then have them purchase the toxic assets from all the wounded […]


Hall of shame

Hall of shame

A few weeks ago, they packed up the famous monuments at old Yankee Stadium, loaded them into a large truck, and moved them to the new Yankee Stadium across the street. We’re not sure why it was necessary to use a truck to carry the monuments a few yards to their new resting place in the outfield of the new $1-billion ballpark. Perhaps the Steinbrenner dynasty was concerned that some evildoers might attempt to steal the crown jewels of the Yankee legacy. Well, they can rest easy, the monuments are safe. Unfortunately for them—and the rest of us—it’s two outs in the bottom of the ninth for everything these monuments ever stood for. And not just in the Bronx. The belated admission from the Yankees’ $275-million third baseman that yes, in fact, he partook in the festival of artificial enhancement that has plagued our national pastime for more than a decade is sickening but not shocking. Perhaps it is sickening because it is no longer shocking. In this winter of our discontent, it seems we have all but exhausted the supply of outrage in America. Let’s face it, it’s hard to get worked up about a juiced ballplayer when you have seen an entire economic system collapse in an orgy of uninhibited greed and then watched the perpetrators reward themselves with obscene bonuses financed by the taxpayers who bailed them out. The damage to baseball’s century-old record book can be repaired with a few dollops of whiteout. Fixing the banking system? Well, that will probably take trillions. Timmy Geithner will let us know as soon as he finishes correcting his latest income tax filing. A-Rod’s brainless decision a few years ago to risk a sure place in the pantheon of baseball greats for an extra 10 feet on his home-run swing and a bundle of cash also seems rather trivial compared to the amoral calculations of those who chose to throw out four hundred years of civilized law and torture individuals deemed to be enemy combatants in a borderless war without rules. Now batting clean-up in the good old U.S.A., shame, shame and more shame. There’s been a lot of talk about character lately, and a few minor adjustments have been made in the national moral compass to try to nudge things in the right direction. The bank frauds have been told to limit themselves to a measly $500,000 in compensation if they want billions more in federal largesse. The torturers have been told to stop torturing people while we […]